Oil prices fell on Monday ahead of a meeting of the U.S. Federal Reserve (central bank), as investors try to gauge the Fed's inclination regarding interest rate hikes. Concerns related to fuel demand growth in China and increasing supplies of Russian crude have influenced the market.
By 00:58 GMT, Brent crude futures had decreased by 29 cents, or 0.4%, to $74.50 per barrel. West Texas Intermediate crude dropped by 24 cents, or 0.3%, to $69.93 per barrel. Both benchmarks recorded their second consecutive weekly decline last week, following disappointing Chinese economic data that raised concerns about demand growth in the world's largest crude importer. This concern outweighed the price recovery driven by Saudi Arabia's decision to cut production by one million barrels per day in July.
Most market participants expect the Fed to keep interest rates unchanged at the conclusion of its monetary policy meeting on Wednesday. An interest rate hike strengthens the U.S. dollar, making dollar-denominated commodities more expensive for holders of other currencies, which in turn pressures prices.
Goldman Sachs has lowered its oil price forecasts due to higher-than-expected supplies from Russia and Iran, raising its supply forecasts from the two nations and Venezuela for 2024 by 800,000 barrels per day.
